Doug Ashbury
Northern News Services

Yellowknife (Dec 15/99) - Miramar Mining Corp. is positioning itself to play an even bigger role in the North's gold mining sector.

Last week, Miramar announced plans to partner with Cambiex Exploration Inc. to buy the Hope Bay gold property from BHP Diamonds Inc. Miramar has to pay $19.7 million for its 50 per cent stake. The deal was scheduled to close Monday.

Subject to feasibility and permitting, Miramar is targeting 2004 for development of a mine at the Hope Bay property, located about 700 kilometres northeast of Yellowknife.

"With our operating experience in the North, this (Hope Bay acquisition) was an opportunity to build on that," Miramar president and CEO Tony Walsh said.

Asked if Miramar sees the Nunavut property as a replacement for its Yellowknife operation, Walsh said the company sees Hope Bay as a "complement" to Con mine.

"This acquisition is in line with our strategy to grow our production base in the North and it will fit in well with our operations at Con mine, as well as the proposed acquisition of the Giant mine." On Giant, Walsh would only say "discussions are continuing."

Hope Bay, which includes Boston, Doris and Madrid properties, has an inferred resource of 4.3 million ounces of gold.

"We believe that Hope Bay is one of the best undeveloped gold projects in Canada, with in excess of four million ounces of gold in resources already defined, giving Miramar an effective purchase price of $8.85 per ounce or resource going in, without diluting our shareholders," Walsh said.

Walsh also said gold production costs at Hope Bay are expected to be under $200 US an ounce. Gold is trading in the $280 US range. Walsh said production costs are anticipated to be low because the property has a "relatively high grade" and the resource is accessible by ramp.

Hope Bay's Doris property has a grade of 17.80 grams per tonne while Boston grades 13.10 grams per tonne. Madrid is the lowest grade of the three properties at 4.26 grams per tonne. Con mine grades about 10 grams per tonne.

BHP has spent $85 million in exploration on the property so far. Under the deal with Cambiex, Miramar would be responsible for development and operations of the property. Cambiex would cover exploration work.

The next step in the plan will likely be an in-fill drill program to better define the inferred resource.

Miramar envisions an 1,800-2,000 tonne per day gold mine producing over 300,000 ounces gold per year. The company estimates its mine capital costs at between $147 million and $221 million.

And Miramar plans to access the property, located above the Arctic Circle, via sea and proposed airstrip.

BHP's sale of Hope Bay means its lone NWT-Nunavut asset is the Ekati diamond mine.